Australia & New Zealand Chart Pack IMF too optimistic on Australia and New Zealand In its latest World Economic Outlook, the IMF predicted Australia’s economy to expand by 1.7% in 2019 and by 2.3% in 2020. While the 2019 forecast is consistent with our own expectations, their... 31st October 2019 · 10 mins read
RBA Watch Quantitative easing more likely than not Falling unemployment and steady inflation will allow the Reserve Bank of Australia to leave interest rates unchanged at 0.75% at the meeting on Tuesday, 5th November. However, we expect the... 30th October 2019 · 7 mins read
Australia & New Zealand Data Response Consumer Prices (Q3) While inflation edged up in Q3 we think the weakness in economic activity will cause it to fall again before long, prompting further easing by the RBA. 30th October 2019 · 2 mins read
Australia & New Zealand Economics Update Participation rate should continue to rise We estimate that the participation rate will rise by around 0.35ppt per annum over the next couple of years. That means that the economy needs to create around 300,000 additional jobs per annum to... 29th October 2019 · 3 mins read
Australia & New Zealand Economics Weekly Lack of fiscal stimulus will force the RBA’s hand The new Secretary to the Treasury endorsed the government’s hands-off approach to fiscal policy this week. We suspect the Australian government could increase spending significantly to support the... 25th October 2019 · 5 mins read
Australia & New Zealand Economics Update Fiscal stimulus urgently needed but unlikely We estimate that a fiscal stimulus equivalent to 1.5% of GDP would still be consistent with maintaining Australia’s AAA-rating. Unfortunately, fiscal policy probably won’t come to the rescue, leaving... 23rd October 2019 · 3 mins read
Australia & New Zealand Economics Focus RBA to launch QE as inflation weakens further Underlying inflation was moored well below the lower end of the RBA’s 2-3% target band even as the housing market was booming and the labour market was tightening. With the unemployment rate set to... 21st October 2019 · 17 mins read
Australia & New Zealand Economics Weekly RBA will eventually push the QE button The drop in the unemployment rate in September means that the RBA won’t cut interest rates in November. But we still expect the labour market and underlying inflation to weaken over the coming months... 18th October 2019 · 3 mins read
Australia & New Zealand Data Response Labour Market (Sep.) The RBA will breathe a sigh of relief after the unemployment rate declined in September. But we think it won’t be long before unemployment starts to rise again, forcing the RBA to provide additional... 17th October 2019 · 2 mins read
Australia & New Zealand Economic Outlook RBA to cut to 0.25% and launch QE The end of the housing downturn has reduced the risk of a recession and we expect GDP growth in Australia to edge up from 1.7% this year to 2.0% in 2020. However, that’s still well below potential and... 15th October 2019 · 23 mins read
Australia & New Zealand Economics Weekly Not confident either economy will improve Consumer and business confidence in Australia have both recently fallen to their weakest levels in years. And we now think GDP growth in New Zealand will slow to 1.5% in 2020. That’s why we think both... 11th October 2019 · 5 mins read
Australia & New Zealand Economics Update Cheap long-term loans wouldn’t replace QE Once interest rates approach their lower bound, the RBA could provide long-term loans to banks and link their interest rate to the amount of new lending those banks undertake. However, if the Bank... 7th October 2019 · 3 mins read
Australia & New Zealand Economics Weekly RBA has more work to do The RBA’s interest rate cuts are running into diminishing returns as banks are protecting their net interest margins and loan demand remains muted. Meanwhile, the sluggish increase in retail sales in... 4th October 2019 · 3 mins read
Australia & New Zealand Data Response Retail Sales (Aug.) Retail sales growth remained subdued in August despite the government’s tax cuts which suggests that economic activity did not recover strongly in the second half of 2019. 4th October 2019 · 2 mins read
Australia & New Zealand Data Response International Trade (Aug.) The narrowing in the trade surplus in August was mostly driven by a decline in export prices so we doubt that net trade will be a drag on GDP growth in Q3. Even so, we estimate that the contribution... 3rd October 2019 · 2 mins read
Australia & New Zealand Economics Update Natural unemployment rate probably still at 4% We still believe that the unemployment rate would have to fall to 4.0% to meet the RBA’s definition of full employment. With the actual unemployment rate now at 5.3% and rising, that means that the... 2nd October 2019 · 2 mins read
